A few weeks ago I thought that we should try offering a prize to see what effect it had on the response rate.

However, recent events in Japan have been so horrible that I went cap in hand to the ‘keepers of the marketing budget’ and suggested we do both – offer an iPad 2 as a prize and give a donation to Japan.  Without a minute’s hesitation, they said ‘Do it’!  It’s nice to be able help, even in a small way.

These surveys are really helpful to us and we value your time taken to fill them in.  Questions from the survey come from everywhere, for example, Walter Scott, our CEO, asked for a particular question in this month’s survey.

Participate in this month’s survey

The results are sent to many departments in the company:  Engineering, Marketing, Sales, allowing us to change the product over time to deliver what you need based on your responses so if you’re an MSP or IT Support Company please complete our survey to help us, help Japan and be in with the chance to win an iPad 2.

Anyway, I reckoned, I’d better get a bit of advanced view seeing as I ran an MS Gold Partner and it was my job to sell, install and look after the new software.  So, I ditched my trusty old clunker and bought a powerful new shiny laptop to run Vista and Office.

I had a brainstorm and copied the data from my existing laptop and my home PC onto my new toy and standardised on one laptop to do all my work on.  It was to be the centre of my life, so I’d always have all the data/media I required at hand wherever I was.

Fast forward to 2011 and I’ve got three work laptops (complicated work life – don’t ask), one MacBook which floats, an iPhone, an iPad and an iMac at home (photos, powers my stereo and doubles as a TV).

How’d that happen …. when I was aiming to simplify?

• Pictures became more important to me (new baby) and seamless connection between iPhone and iMac was lovely.
• iTunes plugged nicely into my stereo and gave me a good enough sound representation
• Access to Email, Calendar & Tasks via iPhone and OWA meant I didn’t have to cart the laptop about anywhere.
• The iPhone is pretty cool, combination Email, Internet, Calendar, Apps, Camera, iTunes and Photo library means I can fill up dead time with work or recreation.
• iPad, well just because I wanted to.
• I seldom turn on a laptop out of the office, and only if I have to do something with Excel or write some documents.
• I spend 85% of my time using consumption devices (iPhone, iPad, iMac) and my MacBook (Note, I probably could create docs on this and even though I’ve got the latest version of Office but I tend to stick to my windows machines because I can use the software quicker).
• At work, I work exclusively on a Windows laptop.

So, did simple come to mean something else?

I think it did.  One device to do everything became 7 devices which I use to accomplish particular tasks in different places.  The devices don’t follow me (except the phone) but the data does.

So what does this mean for a guy running an IT Support business that supports small businesses?

Firstly, I’d be very surprised if they’re quite as Microsoft-centric as they used to be.

Apple have invaded from the home (content consumption) and people want to bring them use them in their work. Note, we’ve not really mentioned Google, but it goes without saying that they’re actively trying to expand their role from the internet and the mobile device also.

Secondly, storage and synchronization of data are huge issues and take significant time to design and support secure and working solutions.

Thirdly, data encryption, security is an even more critical consideration than it used to be.

Fourth, bring your own device is something you’re just going to have to get used to.

One of the reasons we managed to do this was successfully joining the dots between different systems in use in our IT company.

The leg bone was connected to the knee bone

We had to pay a developer to do the magic for us, but it worked well and allowed us to scale with very little falling between the cracks.

GFI MAX RemoteManagement sent alerts to our helpdesk system.  Our helpdesk system was joined to our billing system.  Our billing system was joined to our accounting system. Our sales quoting system was joined to our billing system, etc, etc.

In any event, by building these all together we were able to scale quickly while retaining profitability and delivering what our customers wanted.

Fast forward to Today

These days it’s much easier.  Most pieces of software that you can buy or rent to run these businesses are very capable of being tightly integrated via API (application programming interface).

Consequently, it’s possible to build a coherent uber-system by building your systems together using APIs and perhaps a tiny bit of coding.

My Take

To my mind, as long as integration is tight and relatively simple – it’s probably best to use the best tools for the job rather than looking for one ‘monolithic’ system which claims to do them all (but probably doesn’t), is likely to cost a fortune and will probably have you using just 10% of it anyway.

I guess it’s much like the 7 layer model, allowing you to swap in pieces of technology to run particular layers of your operation ever more efficiently.

And I’m thinking, there’d have been no interweb without the 7 layer model.

If you’re a hard pressed IT Support Company there are many advantages to Remote Support which can bring huge benefits to your business (and your life).

1. Billable Hours, Efficiency & Profit. You can hugely reduce cost of travel, vans, time, etc by doing more work remotely.  And, if you’re clever, you can do multiple jobs at the same time, which can lead to greater than 100% utilisation and increased billable time or profit (where you’re working on contract).
   
2. More Customers. Being able to do more work in the same time you’ve got available means you can scale your operation.  You’ll be able to take on new business with resultant increase in revenue and profit without a great increase in costs.
3. Avoid Context shifts. Having to answer a call, finish what you’re doing, jump in a car, drive to site, do the work, come back, and try and remember were you left off robs you of focus.  You can focus better with fewer interruptions by doing more remotely.
4. Faster more responsive service. Your customers want their problems or requests actioned right now.  Remote Support software will help you deliver faster and more responsive support by cutting out travel.  Your customers will be happy and will tell their friends.
5. Work out-of-ours. Sadly, as an IT guy, you’ll have to occasionally work outside of working hours.  Far better to do it from your own office (or home!) and far better for your customers if they don’t have to stay behind to give you access to their office.
6. Pro-active maintenance. Related to the above-mentioned advantage, you’ll be way more inclined and find it much easier to offer and carry out pro-active maintenance on your clients’ systems.
7. New Business models. Because you can do more with less, you can scale more effectively.  You’ll be in a position to offer fixed monthly cost contracts with all the vast benefits these bring:  More steady cash flow, deepened relationships, more predictable business and less stress.
8. Bigger pool of Potential Customers. You’ll be in a position to offer your services outside of your current geographic location and be able to service them effectively.
9. OK it’s actually eight advantages. But! And it’s a big but… too much Remote Support can cause relationships to suffer and therefore sales can suffer.  So to my mind, you need to be very careful and balance this all with face time where you or your techs can chat, listen to what’s going on so as to retain friendly relations, extra sales and a long term relationship.

Just to be clear, I’d suggest that Managed Services is a very distinct risk model from the standard break/fix (or professional services) hourly billing norm.

In Managed Services your IT Support Company takes on the risk.  It does the work to keep IT systems running well and provides an account management layer on top of the work it does.  Essentially, it takes the problem off your ‘customer’s desk’ in return for a fixed fee.

We speak to thousands of IT Support companies who tell us they are very interested in this model but they’re not sure how to do this. They’re unsure about packaging this, promoting this, pricing this, selling this & how to deliver this service profitably.

So our Building Blocks program helps them do this – grow recurring revenue service’s – which is great if you can.

However… Managed Services as defined above doesn’t suit every customer or every customer relationship IT Support companies have.  And it doesn’t suit every IT Company either.

Dead Within 3 Years?

I hear a lot of hype such as ‘if you’re not a managed service provider within 3 years, you’ll be history’.  I think it’s nonsense.

Most IT companies I speak to run a hybrid model (Break Fix + Managed Services) because that’s what their customers demand (and I speak to a lot).

I read stats like only 10% of IT Support companies in the US are ‘true’ Managed Service Providers and I shake my head…. My take on it is that’s because some of the end customers prefer it that way (just now).

I’ve myself proposed and sold both break/fix and managed service relationships and I once tried telling a lawyer who clearly understood hourly billing that I proposed billing him the same fee every month regardless of how much/little work our company did.  He raised an eyebrow, I got the message.

So, do what your customers need you to do.  That’s what’s important.

“It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better.

The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat.”

It reminded me that our company should continue to deliver outstanding and friendly service to our customers in the face of constant ‘improvement’ from our own internal finance department.

Our internal finance department no doubt wanted us to deliver highly efficient  IT Support. They wanted us to win on almost every transaction but I had a hunch this isn’t the way to build great customer relationships.  Customers want a long term relationship with somebody who keeps their IT running, who is dependable, friendly, trustworthy and somebody who views a business relationship with a bit of give and take.

It reminded me of the parable of the Golden Goose – it goes something like this;

A man and his wife had the good fortune to possess a goose which laid a golden egg every day. Lucky though they were, they soon began to think they were not getting rich fast enough, and, imagining the bird must be made of gold inside, they decided to kill it. Then, they thought, they could obtain the whole store of precious metal at once; however, upon cutting the goose open, they found its innards to be like that of any other goose.

• Your technical services are your golden eggs.  Look after these.
• Your technicians are your Geese.  Find good ones and look after them and let them do their thing (with as little ‘guidance’ as possible)
• Your finance department might be the farmers – if they’re that way inclined – ignore them a bit.

I had a way of ranking my staff which enshrined the above – but that’s another story.

This week I caught a minute to reflect on what it was like to be in the ‘hot seat’ running a fast growing IT Support company, doubling in size every year.

I remember it was exciting but hard work, made even harder by my slavish dedication to do the right thing for my customers at all times.  Even, if that meant losing out occasionally in the short term.

I wanted customers to be certain of our integrity.  Anything we suggested to them was because we thought they needed it.  Not because we fancied selling it to them or needed the profit from it.

This reminded me about how it felt when software/hardware vendors were trying to sell us stuff, or pitching to get us to sell on their wares.  Right in the front of my mind was ‘how will this suit our customers?’

Which in turn, caused me to consider our own position as a Software Provider for Support Companies – do we ask them to do something because it suits our mission but puts their reputation for integrity at risk?

You are now entering ‘DoWhatYourCustomerWantsVille’ – Please drive safely!

I got to thinking that ‘no we don’t!’  Our Building Block program basically says – The road to success goes straight through ‘DoWhatYouCustomerWantsVille’.

If your customer wants break fix, we can help you help them.  If they want a fixed cost deal – again, we can help you help them.  We aren’t proscriptive.  Building Blocks are ‘take it or leave it’ ideas and useful material you can use to move as far towards managed services as it suitable for your customer (NB:  use of towards rather than to).

Moreover, our Product and Pricing suits this well!  It’s very possible to use GFI MAX RemoteManagement™ for your break fix customers and reap dividends on extra hours billed, extra equipment sold, etc.  It’s also possible to use GFI MAX RemoteManagement for fixed cost support for huge efficiencies, etc.  And it’s possible to use and pay for different parts of the system (or none at all) for different customers.

Now, considering the same question in relation to our competitors and the ‘Managed Service Industry’; do they ask IT Companies to do something predominantly because it suits their own agenda?

You are now leaving ‘DoWhatYouCustomerWantsVille’ – Thank you for driving safely!

Welcome to ‘TailWaggingTheDogVille’

Regarding the Managed Services Industry – Hmmm, I was a managed service provider (apparently)…  long before I’d even heard of the term. I did what was sensible and delivered what was required to profitably service our customer’s wishes. A whole industry/army of consultants/people with a vested interest in making this seem difficult built up around that?

Regarding our competitors – They package and license their products and programs entirely differently to us.  It’s my contention that they need everybody to be offering Managed Services (Fixed Cost) so that they can shift their software (because of the product design & pricing deal).  So they bang this drum hard.

We ‘tap’ the drum of ‘Managed Services’ and other drums besides, because it’s the right thing for you to do for your customers.

GFI MAX RemoteManagement software and pricing fits all models.  That’s why we can say – do what’s right for your customer and you!!

Or perhaps you’d rather do the right thing for folks with software/consulting/sales programs to sell?

Our conscience and our customer’s conscience are clear.

I was digging for more information to see if I could help him and it turns out he was tired of the constant strain, hunting for new work, tired of having fixed costs and highly variable revenue.

It reminded me a lot of when I stepped out of corporate IT in 2000 and thought I’d set up a small IT company providing IT support to small businesses in my area.  Sound familiar?

In any event, I went off and did it. It was hard but we did well enough.  One key worry was ‘how can I build and protect my reputation when I don’t know what was going on with customer’s equipment?’  I realised I was always on the back foot.
So, I looked to see if anybody else had software I could use. I couldn’t find anything suitable, so I worked on cobbling together various systems.  I realised that others might need this facility and worked in my spare time for six months.  Eventually I sought help from a more experienced business person.  We worked together on this for a year or so and it became clear that there definitely was a need.  But we had a problem – my skills/experience weren’t particularly relevant to bring this to market.  We really needed, but couldn’t afford, developers – which I certainly wasn’t.

So I went back to being an IT Guy and by the by, we were right.  There was a need, as in time this software became GFI MAX Remote Management.

Back to being an IT guy. I stuck mostly to monthly support contracts.  I tried to match my fixed costs with recurring revenue (either firm or almost firm).  And if other projects/sales came along that was icing on my cake.

I packaged services, marketed our capability, sold these arrangements and ensured our technical guys delivered our promises in a friendly yet professional manner.  I tried various ways of removing costs and gaining efficiencies.  I tried to be more pro-active to reduce the effort involved in providing these contracts.  And I tried to build longer term and more strategic relationships with customers to ensure any new equipment, projects, etc went through my company.

I realise I might have been a Managed Services Provider – except this was way back in 2004 before I’d even heard of the term.  In time, our company became one of the fastest growing and most well-reputed IT Support Companies in our country.  In 2009, I decided it was time for something else, took some time off and ended up working at GFI on GFI MAX.

Anyway, back to the guy at lunch – I told him how I scaled my IT Services business and watched as the light went on in his head.  He realised he has to package and sell more recurring revenue services that he can deliver profitably and use this to augment his other more lucrative services.

So, today in GFI,  I spend my time creating packaged IT services, creating sample marketing material, creating sales material, creating implementation material (contracts, SLA’s, implementation considerations), etc for break fix IT services companies who are running themselves ragged and are keen to move to a recurring revenue model, but don’t know the way. Thus evolved GFI MAX Building Blocks.

• Only 4% report they use the full potential of the system they buy.
• 50% said it took a month or longer to setup and more worryingly 20% said it took in excess of 6 months to setup.
• 53% stated they pay for areas of the system they don’t use.

Frankly, it’s not a surprise that so little use software to its full potential.  I’m guessing most people use approximately 20% of features. Could this mean that software vendors ‘over-engineer’ and then look to ‘recover’ and ‘profit’ on their efforts? I guess so, because our own industry has even coined the term ‘shelf-ware’, a term for unused software, features & licenses.

Anyway, it got me thinking… I started to consider software in relation to ‘Lean’… In ‘lean’ there are 7 wastes (‘mudas’) defined and I’ve had a bash at adapting them to fit the software business:

• Over-Production – Creating features which aren’t used by the vast majority of users.  In lean, this is by far the worst waste as it causes & exacerbates other wastes.
• Unnecessary Transportation – I guess this could apply to on-premise software where you’ve to box it, ship it distribution, ship it to users who then takes it out the box and installs it.  I think it applies less so to SaaS producers.
• Inventory – In terms of software production this could be pieces of code which aren’t used in the current build or are work in progress (not yet complete).
• Defects – Self-explanatory – shipping code which doesn’t work as it should.
• Over Processing – any waste in producing code.
• Motion – any movement between parts of production process – I reckon this equates to ‘context switching’ – start-up overhead associated when coding a new piece of functionality.
• Waiting around – time between completing a feature and users using it.

Clearly, in the survey above, a large percentage of RMM software users are saying they generally believe RMM software is over-produced (over-engineered) and they either never or very slowly get round to using it.

I guess what this says is that IT Companies who buy this particular type of software want a producer who doesn’t over-engineer their product, who delivers via SaaS, who provide a method of paying only for relevant bits of software on a basis which is closely tied to a return on purchase, who uses agile development to deliver beneficial features, and who releases their new features with useful education, motivation & collateral for their user base to profit from.  Sounds like a plan?  It does to us.

And back to the survey, one staggering fact on demand for IT Support on a fixed cost basis – 51% said it’s difficult to show value from managed services, ie: selling these arrangements.

Back to ‘Lean’.  In lean, if your customer doesn’t value it, you stop doing it.  End of debate! You find out what your customer values then spend as close to 100% of your time doing only what your customer values. Simple as that!

I’ve got a hunch that consumers of IT services do value work getting done, i.e.:  IT help – they value how quickly, accurately and efficiently an IT company does this work and they value communication and the relationship an IT company has with them.

Now if you could clearly package, price and run your arrangements to reflect the above – I hope selling Managed IT Support Services would be less of a problem.

So recently we gathered a group of GFI MAX customers together and held our first Advisory Council. This was a healthy mix of customers, both well established Managed Service Providers and traditional break fix guys. They flew in from across Europe to meet in the beautiful city of Edinburgh.

It was a great session. We covered lots of ground. It was good to see that many of our assumptions proved right, but there were a couple of AHA! moments also. You know the comment that makes you stop and think.

One of the attendee’s was answering a question about how they ran their support operation and he said something which made me nod as I did exactly the same thing in my previous life running a Managed Service Provider (MSP).

When questioned about the ‘shape’ of his technical team, he said it was upside-down in comparison with most other IT companies, ie: it was full of highly competent and experienced people, and these people answered the phone and dealt with customer issues and less experienced guys did projects. Traditional wisdom would be – get less experienced guys answering the phone and only bothering experienced guys with really big problems, ie: a tiered first/second/third line approach.

This guy ran an incredibly impressive operation and was able to offer IT support profitably, for an astonishing price. He was scaling his business rapidly and his customers loved what they were doing. He was absolutely on the ball and I enjoyed chatting to him.

I guess what he found out (as did I) that cost of re-work, customer’s ‘progress chasing’ or having three or four cuts at solving a user problem made him much less profitable and more importantly was exactly what his customers didn’t want.

To relate a bit of my story, I had a guy in my IT Co who spent a lot of time interviewing our customers and we arrived at the conclusion that in terms of support, our customers wanted ‘fix my problem quickly, fix it first time, tell me what it was and how you fixed it, and tell me how I can stop it happening again’.

So, speed and first time fix was incredibly important to customers when asking for IT help. Having a tiered first/second/third line support operation, passing requests up to the ‘cheapest’ person who could fix them was delivering the opposite to what our customers wanted from us.

Not only did this ‘tiered structure’ annoy customers, it caused ‘failure demand’ to be placed on our system. Failure demand is ‘demand’ placed on our business when we didn’t do what our customers wanted when they wanted it, eg: chasing progress, complaining something hadn’t been fixed or another technician having a second go at a problem. The cost of this failure demand is astronomical, interrupted us from delivering what our customers wanted and it was often frustrating for our technicians.

This whole thinking is part of an approach to services called ‘Lean Services’ where a whole business process is re-designed to eliminate ‘wasteful’ work – and ‘wasteful’ is determined in the eyes of the customer.

For an entry point into Lean Services, look here: http://en.wikipedia.org/wiki/Lean_services.

To finish off, the very last question at the meeting was ‘As a managed service provider – what are you afraid of?’

I thought to myself, ‘if I was still running a Managed Service Provider’ – I’d be afraid of that guy because he really understood how to deliver fixed cost IT support profitably and in a way his customers loved.